Social care – the last thing we need is failed reform

A move towards personal budgets for social care offers wide scope for savings and improvement. But, warns Jamie Bartlett, of think-tank Demos, it won’t happen overnight and in the meantime care standards must be maintained

Social care services can ill afford spending cuts. The current system is unfair and underfunded with widespread unmet need. It is also unsustainable due to the increasing demands and expectations of our ageing population, and more people living longer with disabilities and dementia.

The budget pressures on councils, mainly Tory controlled, will intensify in the face of this growing need and worse is to come: to top it all off, the budget deficit means local authorities are expected to make very considerable cuts in spending.

So how far can personal budgets – to be introduced across the whole of adult social care over the next few years – deliver better services for less cost?

Early evidence suggests that giving people control over a budget that they choose how to spend could save as much as 10 per cent a year, which would equate to around £2bn.

This is by more effectively matching resource to need, and cutting down on infrastructure costs. Because of the way personal budgets function it will also be easier to make cuts, by top slicing everyone’s budget – although that is an extremely risky strategy.

Genuine efficiencies will only be realised, however, if the market is leveraged properly. Rather than local authorities determining need and purchasing in blocks, giving people control over money should stimulate the market to respond – offering people more choice with which to meet their needs, while the competition pushes service costs down. In Colorado, the introduction of a voucher market for therapists led to a decrease in hourly costs from $41 to $27. There are signs a similar downward pressure is taking place here.

However, as with any market, two things need to be in place. First, people need to be informed about choices and have genuine control and confidence to navigate the market. Many people using social care services lack those capabilities, and so local authorities will need to help them.

Secondly, there needs to be a varied and vibrant market that can respond to the types of demand personal budgets will surely bring, and this always takes time. Local authorities have a vital role here too. Certain services will be in short supply in the next 18 months as the market reshapes – for example in the provision of personal assistants. They must move to stimulate and develop existing markets to help ensure that it, too, is ready for the change. The last thing social care can afford now is a failed reform.